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Global trade talks could end in disaster, MPs warn

Charlotte Denny
Tuesday July 15, 2003
The Guardian

Backbench MPs warned Patricia Hewitt that deadlocked global trade talks
could end in a repeat of the disastrous Seattle meeting unless Europe
drops demands for negotiations on new issues such as investment.

With less than two months to go before the World Trade Organisation's next
meeting in Cancun, MPs on the international development committee said
Europe should stop forcing its priorities on to the agenda against the
wishes of developing countries.

"The chances of a genuine development round being delivered and of Cancun
being a success are not improved by overloading an already overcrowded
agenda," MPs said in a report published yesterday.

MPs urged Europe and the US to live up to their promise that the new round
will be good for development by focusing on the key issues for poor
countries. Without substantial cuts to farm subsidies and an end to the
deadlock over imports of cheap copycat drugs, MPs warned that the Cancun
talks could collapse.

"Much is at stake: the development prospects of half the globe,
international security, multilateralism and transatlantic relations," the
report said. "So far, the signs are not good."

The European commission wants greater access to the developing country
markets for EU firms to offset the pain of curbing its farm subsidies in
the new round.

But with half of the WTO's developing country members opposed to the new
issues, Europe's strong support has put Britain in a difficult position.
Last month Ms Hewitt promised the UK would put the interests of developing
countries first in the new round.

Privately, Whitehall officials say Britain no longer wants talks on
investment and competition but is unable to break ranks with Brussels.
"There is no way we could go against the EU now," said one official.

The MPs welcomed statements by Lady Amos, the new international
development secretary, that investment was no longer a priority for
Britain but urged her to persuade the rest of Europe to drop the issue.

"These issues are not wanted by most developing countries. And it is
questionable whether the WTO is the right forum for agreements on
investment and competition," the report said.

MPs rejected calls by some lobbyists for a halt to trade liberalisation,
saying that trade was an important route out of poverty for many
countries. The report calls for "cautious liberalisation" rather than the
wholesale sweeping away of trade barriers that many countries were forced
to implement by the World Bank and IMF.

Developing countries are becoming frustrated with the lack of progress on
issues such as access to medicines and cutting farm subsidies, which were
to be decided ahead of Cancun. Washington has so far vetoed attempts to
find a compromise over cheap drugs.

"US opposition to an agreement on patent rights and public health puts
Cancun and the whole 'development agenda' at risk," the report said. It
attacks Brussels' recent overhaul of the common agriculture policy,
warning that the switch to paying farmers for protecting the environment
was unlikely to curb the mountains of subsidised food Europe dumps in
developing countries.

"Market distortions produce a wasteful, warped world in which millions of
people are unnecessarily trapped in poverty," the report says. "The
recently agreed CAP reform will not tackle directly export subsidies, and
will fall far short of stopping the dumping of EU surpluses."